Ethena [ENA] up 36%: Will it break the $0.46 resistance?

Ethena has made a significant recovery, increasing by 36% in just over a week and securing a place on the top weekly charts.
While the current trend is optimistic, AMBCrypto recommends proceeding with caution.

Ethena [ENA] was introduced six months ago at an initial coin offering (ICO) price of $0.57, reaching $1.46 within the first week. However, it has since been subjected to a bearish trend.

Yet, in mid-September, ENA surpassed its prior rejection point, hitting $0.413 – a robust 36% increase in a single week.

As per AMBCrypto, ENA’s next objective is to retest the $0.46 resistance, provided the upward trajectory is maintained.

Ethena introduces new initiatives

Ethereal Exchange has suggested integrating its decentralized exchange (DEX) with Ethena’s hedging engine, generating excitement in the market, as evidenced by a 10% increase in ENA over the last 24 hours.

If this proposal is approved, ENA holders could receive 15% of any forthcoming Ethereal governance token.

In essence, this would enable the Ethereal DEX to oversee on-chain spot and derivative positions supporting USDe, Ethena’s native stablecoin, which is also anticipated to be pivotal in upcoming developments.

Source : IntoTheBlock

Interestingly, a major segment of holders with net losses constitutes 85% of total ENA allocations.

According to AMBCrypto, this concentration implies that most investors are holding at a loss, likely awaiting a shift or significant developments to recover their value.

Therefore, while Ethena’s forthcoming roadmap might enhance network liquidity, it may fall short of initiating a sustained bullish trend. Unless…

Support from major holders

Following the bearish downturn in Bitcoin in late August, Ethena experienced a similar decline, majorly impacted by large holders liquidating portions of their holdings.

Importantly, whales, representing 85% of this group and owning around 13.45 billion ENA, have continuously sold off parts of their assets.

Nevertheless, in the past week, net outflows from these holders have been increasing daily, totaling approximately 12 million just two days ago.

Source : IntoTheBlock

This indicates that these whales significantly contributed to the recent 36% rise in ENA, beginning their accumulation as Ethena hit its market low.

While this signals a potential bullish trend, a pullback may occur if these whales resume selling their assets.

Caution is warranted

In the past week, speculative trading surrounding Ethena has been mainly driven by traders shorting ENA.

Historically, the start of September saw market shorts dominate, leading Ethena to seek support around $0.19.

Source : Coinglass

Nonetheless, even with the increase in shorts, they were unable to instigate a pullback, as whale activity countered much of the pressure, resulting in an ideal short-squeeze scenario.

However, should the market capitulate to a downturn in BTC and whales lose confidence in future gains, a resurgence of shorts could jeopardize the rally, diminishing the impact of the recent announcement.

Regardless of the situation, here’s ENA’s market cap in BTC terms

Therefore, investors should remain vigilant. While the recent proposals have generated interest among investors, the influence largely rests with major holders.

According to AMBCrypto, keeping an eye on their activities is essential for bringing Ethena closer to its previous rejection level at $0.46.